Home Affordability – Myth or Reality
Home Affordability: Myth or Reality?
For many young couples, the idea of owning their own house just like their
parents is an attractive idea, but it’s not very realistic. A recent poll
conducted by the Associated Press and America On Line Real Estate showed
that 80 percent of respondents believe that it is hard for first-time
buyers to afford a home. A majority of those polled – 59 percent – also
said that they believe it is harder to buy a home now than it was five
years ago.
Taking a closer look at the poll reveals that young adults and those that
classify themselves as minorities consider the affordability of homes a
bigger problem now than five years ago, compared to those over the age of
50 and those that identify themselves as white.
Broken down by region, almost 70 percent of those living in the western
United States and almost 65 percent of those living in the Northeastern US
say that it’s harder to buy now than five years ago, compared to only 54
percent of those living in the South and 51 percent of those living in the
Midwest.
The poll also found that almost half of those surveyed thought that the
real estate market in their home area was overpriced.
A recent report by the census bureau seems to back up the findings of the
AP/AOL survey. The census report found that approximately one third of all
homeowners in the US that have mortgages spent at least 30 percent of their
income on housing and housing related costs. It’s widely considered
excessive if your housing costs make up more than one third of your income.
The census took things like mortgage payments, insurance and utilities and
taxes into account.
The biggest reason for this lack of faith in new home ownership can be
directly attributed to the recent housing boom over the last five years.
Also, a recent increase in mortgage rates has also dampened optimism. And
while incomes are up, as well, most don’t even keep up with inflation.
Another recent trend that has kept optimism for first time home buyers down
is the 32 percent jump in median home value from 2000 to the end of 2005.
The current median price is around $167,500.
While buying your first home is never easy, things may be a bit harder now
than they have ever been. But bargains so still exist, and if you’re
patient, a first home can still be yours.
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Tags: Aol, Associated Press, Census Bureau, Census Report, First Time Buyers, Home Affordability, Home Directory, Home Ownership, Housing Costs, Incomes, Minorities, Mortgage Payments, Mortgage Rates, Optimism, Recent Poll, Respondents, Taking A Closer Look, Western United States, Young Adults, Young Couples